There is no right answer. BUT, my husband got a mortgage less than a year after his foreclosure through his CREDIT UNION. He got approval for conventional with 3% down, it took four months to get the approval. This is virtually unheard of in the mortgage industry, but credit unions have different rules than other lenders. If you belong to a credit union check there first, if not shop every credit union out there and shop a few mortgage brokers also. Changes are slim to none, but it does happen. I am not a lender and cannot give lender advice, but I wouldn't recommend closing your IRA unless you know there is someone who will pre-approve the loan.